Chapter 9 Retirement Plans

How long does an individual have to "rollover" funds from an IRA or qualified plan?

60 days

An IRA owner can start making withdrawals and NOT be subjected to a tax penalty beginning at what age?

59 1/2

An individual working part-time has an annual income of $25,000. If this individual has an IRA, what is the maximum deductible IRA contribution allowable?

$2,500 (10%)

An individual participant personally received eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for this transaction?

20%

Who is normally considered to be the owner of a 403(b) tax-sheltered annuity?

Employee

Which of these retirement plans can be started by an employee, even if another plan is in existence?

IRA

Tom has a qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be interpreted?

If Tom's employment is terminated, 20% of the funds would be forfeited

At the age of 45, an individual withdraws $50,000 from his Qualified Profit-Sharing Plan and then deposits this amount into a personal savings account. This action would result in:

Income tax and a 10% penalty assessed upon funds withdrawn from the Qualified Plan

A 55 year old recently received a $30,000 distribution from a previous employer's 401k plan, minus $6,000 withholding. Which federal taxes apply if none of the funds were rolled over?

Income taxes plus a 10% penalty tax on $30,000

A retirement plan that sets aside part of the company's net income for distributions to qualified employees is called a:

profit-sharing plan